The Government has announced the first major wave of funding from its £39 billion Social and Affordable Homes Programme (SAHP), representing a significant commitment to increasing the delivery of social and affordable housing across England.
Almost £10 billion of initial funding has been allocated to councils, housing associations and other providers, supporting the delivery of more than 70,000 new social and affordable homes.
This forms part of the Government’s wider ambition to deliver 300,000 social and affordable homes, with a strong emphasis on increasing the supply of homes for Social Rent.
But what could this mean for landowners, developers and housebuilders?
Contact UK Land Consultancy to discuss how this can help you.
A Renewed Appetite for Affordable Housing
One of the most significant aspects of the programme is the long-term funding commitment.
Rather than short-term funding rounds, the Social and Affordable Homes Programme runs from 2026 to 2036, potentially giving councils, Registered Providers and other delivery partners greater certainty when planning their development programmes.
The first allocations include 33 Strategic Partners, consisting of councils, housing associations and other providers capable of delivering affordable housing at scale.
For developers, this could create new opportunities to work with funded organisations seeking land and development opportunities and completed or pipeline housing stock.
Section 106 Remains Important
For developers currently dealing with affordable housing obligations, there is another important point within the Government’s announcement.
Section 106 agreements will remain an essential mechanism for delivering social and affordable housing.
This is particularly relevant given the difficulties some developers have experienced in finding Registered Providers willing or able to acquire their Section 106 affordable housing units.
The new funding programme does not simply replace the existing Section 106 system.
Instead, the Government intends grant-funded affordable housing and developer-provided Section 106 affordable housing to continue operating alongside each other.
Could This Improve Demand for Affordable Housing Stock?
Potentially.
Greater long-term funding certainty could strengthen the ability of councils and housing providers to plan acquisitions and development programmes.
However, developers should not assume that every Section 106 scheme will automatically become attractive to a Registered Provider.
Location, tenure, specification, management requirements, number of units, timing and financial viability will all continue to influence whether an organisation is prepared to acquire affordable units.
This means that early engagement remains extremely important.
Waiting until affordable units are approaching completion before attempting to identify a purchaser can create significant delays, additional finance costs and, potentially, complications with the wider development programme.
Opportunities Beyond Section 106
The programme could also create opportunities for developers capable of delivering housing outside their existing planning obligations.
Homes England’s programme includes routes allowing developers to work with Registered Providers to deliver affordable housing beyond planning requirements, including delivery on a turnkey basis.
There are also provisions allowing funding to support the acquisition of certain homes originally constructed for market sale where converting them to affordable housing can accelerate delivery or increase affordable housing supply.
This potentially creates another route for developers with suitable schemes or stock to explore.
What Does This Mean for Landowners?
An increased appetite for affordable and social housing could also influence the land market.
Councils, Registered Providers, developers and other delivery partners will need a pipeline of viable development opportunities if the Government’s housing ambitions are to be achieved.
Sites capable of supporting residential development – particularly those in areas of demonstrated housing need – may therefore attract interest from a broader range of potential purchasers and development partners.
Understanding land viability, planning and disposal options, who is actively acquiring, what they require and how a site should be positioned will become increasingly important.
How UK Land Consultancy Can Help
At UK Land Consultancy (UKLC), we work with landowners, developers, housebuilders, investors and affordable housing partners to help connect development opportunities with the right parties.
Our involvement can include:
- Land acquisition and disposal
- Developer and purchaser introductions
- Development opportunity evaluation
- Section 106 affordable housing disposal
- Introductions to Registered Providers and alternative affordable housing purchasers
- Strategic advice on positioning development opportunities
The announcement of the Social and Affordable Homes Programme is positive news for housing delivery, but funding alone will not deliver the homes.
It requires land, developers, councils, Registered Providers and investors working together to turn funding commitments into completed homes.
For developers struggling with Section 106 affordable housing stock, or landowners considering the development or disposal of a residential development opportunity, now may be an appropriate time to discuss the options with UK Land Consultancy.
Read the Government’s announcement on the Social and Affordable Homes Programme.
